Property owners in CA forced to reduce rents by 25%

https://caanet.org/votervoice/

Ujwal Velagapudi

Investor/Agent/Entrepreneur · Dallas, TX · Member since 2016 · 464 posts · 564 votes

6y

Wow, this would be terrible if it spreads to other states. It makes zero sense. You can't enforce it in the middle of the food chain, it needs to start from the top. Lenders need to be more flexible (late payments, delay payments, restructure terms, etc.), then landlords would be able to assist with this a bit easier. But also like @Ramon Flores mentioned, it's up to the collective group to assist the tenants (banks, utilities, insurance, etc.) and not just the building owners.

When there are already restrictions on evictions the tenants are protected to at least be housed for the time being. So it is up to the landlord, and in their best interest, to work out an arrangement if the tenant does provide proof of hardship. I can't imagine a landlord, in these circumstances, would be unreasonable with a tenant who is facing hardship and risk losing out on cash flow versus working something out.

4 Reply

Brian G.

Rental Property Investor · Los Angeles, CA · Member since 2013 · 1k+ posts · 1k+ votes

6y

@Denise G. Unbelievable - sounds like an attempt to steal private property (ie the fruit of one’s labor).

5 Reply

Filipe Pereira

Property Manager · Windsor Locks, CT · Member since 2016 · 1k+ posts · 1k+ votes

6y

Originally posted by @Denise G.:

Here we go again:

A new legislative proposal in response to COVID-19 would force every rental property owner in California to reduce rents by 25%.

AB 828 by Assemblyman Phil Ting ignores the robust rent and eviction controls already in place statewide. It provides no assurances that landlords can collect rent, remove problem tenants, or get a fair hearing in the court system. Read CAA's letter opposing AB 828 here.

This bill denies equal justice to housing providers by:

Forcing landlords to reduce rents by 25% even if a tenant cannot demonstrate a hardship or need.
Allowing judges and the court system to set rents and change the rental agreements already in place.
Assuming every tenant is facing a hardship related to COVID-19 and must be compensated for this hardship.
Protecting nuisance tenants as it does not require tenants to answer an unlawful detainer complaint
Mandating that rental property owners demonstrate an economic hardship to collect the contracted rent.

AB 828 is an unfair attempt to allow the government and the courts to give reduced rent to all tenants even if they have face no economic hardship, and it provides safeguards for landlords.

Contact your state legislator and ask him or her to VOTE NO on AB 828.

It's insane. Since when can the government just reach in and mingle with private contracts (leases between landlord and tenant)? Seems like a huge over reach. God bless you guys. Fight the good fight. As others have said, CA can be seen as a leader, so for the rest of us, do everything you can to stop this!

Unreal.

https://caanet.org/votervoice/

Joe SplitrockPro Member

Moderator

Rental Property Investor · Sioux Falls, SD · Member since 2015 · 9k+ posts · 18k+ votes

6y

@Denise G. great effort to drive awareness to California rental property owners. Every landlord in CA needs to join CAA and support the organization with money to help advocate. State landlord associations are critical to standing up for owners rights. The money you pay goes to attorneys and supports lobbying. Being a member helps you get critical state specific information.

https://caanet.org/membership-benefits/

I am not from CA and not affiliated with this group, but landlords in CA need to ban together.

The sad thing is reducing rent by 25% means a landlord has less resource to help struggling tenants. It also assumes that every landlord has rents above fair market values. Some landlords are already 20% or more below market value and now you are forcing them even lower. Most tenants (over 50%) do not have loss of income. In fact with state wide shutdown, living expenses greatly decreased. No eating out, no travel, no gas and other expenses are reduced. So most of the tenants have more money, yet landlords have the hardship of slow or no pay tenants that cannot be evicted.

I am all for supporting those in hardship and so is EVERY other landlord I have talked to. I don't see the need for forcing something when landlords are already being kind. This is very disappointing. It is class warfare and anti-business.

3 Reply

Jay HinrichsBusiness Member

Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes

6y

Originally posted by @Filipe Pereira:

Originally posted by @Denise G.:

Here we go again:

A new legislative proposal in response to COVID-19 would force every rental property owner in California to reduce rents by 25%.

AB 828 by Assemblyman Phil Ting ignores the robust rent and eviction controls already in place statewide. It provides no assurances that landlords can collect rent, remove problem tenants, or get a fair hearing in the court system. Read CAA's letter opposing AB 828 here.

This bill denies equal justice to housing providers by:

Forcing landlords to reduce rents by 25% even if a tenant cannot demonstrate a hardship or need.
Allowing judges and the court system to set rents and change the rental agreements already in place.
Assuming every tenant is facing a hardship related to COVID-19 and must be compensated for this hardship.
Protecting nuisance tenants as it does not require tenants to answer an unlawful detainer complaint
Mandating that rental property owners demonstrate an economic hardship to collect the contracted rent.

AB 828 is an unfair attempt to allow the government and the courts to give reduced rent to all tenants even if they have face no economic hardship, and it provides safeguards for landlords.

Contact your state legislator and ask him or her to VOTE NO on AB 828.

It's insane. Since when can the government just reach in and mingle with private contracts (leases between landlord and tenant)? Seems like a huge over reach. God bless you guys. Fight the good fight. As others have said, CA can be seen as a leader, so for the rest of us, do everything you can to stop this!

Unreal.

only ones i know that can do this are BK Judges..

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Juan Crespin

Developer · Denver, CO · Member since 2017 · 11 posts · 0 votes

6y

I'm glad I exited my rental properties there at the end of 2019 but that is terrible to the owner/operators out there.

Ramon Flores

Rental Property Investor · Los Angeles, CA · Member since 2016 · 172 posts · 122 votes

6y

I believe everyone needs to click on the link and send a message ASAP. This is a dangerous thought and if the media starts reporting on this, other states will follow.

If the state congressmen don’t agree with the rent rates then maybe they should supply their own housing and set their own rates. As a landlord I supply clean safe properties at the rent rate set by supply and demand. I don’t force anyone to spend more or sign a lease find they don’t be want it.

3 Reply

Karl B.

Rental Property Investor · Erie, PA · Member since 2015 · 1k+ posts · 2k+ votes

6y

So glad I chose to never landlord in California. They're so anti-landlord it's insane.

Liam B.

Investor · Los Angeles, CA · Member since 2018 · 43 posts · 20 votes

6y

With what seems like the start of the fall in housing prices within the next two years, rental rates will organically fall 25% or a bit less anyways hah.

https://leginfo.legislature.ca.gov/faces/billTextClient.xhtml?bill_id=201920200AB828

Account Closed

Rental Property Investor · Anthem, AZ · Member since 2014 · 7 posts · 10 votes

6y

It is a shame people post stuff like this and people just believe it without reading the actual proposed legislation. It certainly does NOT "force every rental property owner in California to reduce rents by 25%."

Go read it before commenting, please. And my post does NOT mean I support the proposal.

It is almost like a clickbait post to get people to join and send money to caanet

Denise G.

OP

Bay Area, CA · Member since 2018 · 46 posts · 32 votes

6y

Hi Dana, thanks for posting the legislation. Two points. 1) Caanet is not asking you to send money. you are adding your name to a letter to your state legislator. I am not really seeing the part about having to give them money 2) here is the excerpt from the proposed legislation. it clearly states that the court can make the call to have the tenant stay and pay a reduced rent if they show hardship.

The way I am reading it, it is not saying that the whole debt needs to be repaid. This proposal is throwing the legal agreement between the landlord and tenant out the window. And it is not taking into account any hardship the landlord may be experiencing. It seems like you are seeing something I am not.

"the bill would also authorize a defendant, for any residential unlawful detainer action that includes a cause of action for a person continuing in possession without permission of their landlord, to notify the court of the defendant’s desire to stipulate to the entry of an order. The bill would require the court, upon receiving that notice from a defendant, to notify the plaintiff and convene a hearing to determine whether to issue an order, as specified. The bill would require the court, if it determines that the tenant’s inability to stay current on the rent is the result of increased costs in household necessities or decreased household earnings attributable to the COVID-19 virus, to make an order for the tenant to remain in possession, to reduce the rent for the property by 25% for the next year, and to require the tenant to make monthly payments to the landlord beginning in the next calendar month in accordance with certain terms. The bill would require declarations under these procedures to be filed under penalty of perjury."

Account Closed

Rental Property Investor · Anthem, AZ · Member since 2014 · 7 posts · 10 votes

6y

Denise,

I object to the assertions in the original post that it "would force every rental property owner in California to reduce rents by 25%". It does not.
Follow the links and you get an offer to join CAA, $193.25/yr was the fee quoted to me

Then to the bullet points:

Forcing landlords to reduce rents by 25% even if a tenant cannot demonstrate a hardship or need.

As your post shows, tenants do have to show "hardship or need"

Allowing judges and the court system to set rents and change the rental agreements already in place.

True

Assuming every tenant is facing a hardship related to COVID-19 and must be compensated for this hardship.

Not true, there is no assumption as your reply show

Protecting nuisance tenants as it does not require tenants to answer an unlawful detainer complaint

Not true, tenants are required to answer an unlawful detainer as your reply shows

Mandating that rental property owners demonstrate an economic hardship to collect the contracted rent.

True

Finally, all this is only active while a state of emergency for the COVID19 virus is active plus 15 days and completely expires Jan 1, 2021. I think it sets a bad precedent and do not consider it a reasonable law but the assertions in the original post are substantially false and inflammatory as can be seen by the subsequent comments

4 Reply

Ramon Flores

Rental Property Investor · Los Angeles, CA · Member since 2016 · 172 posts · 122 votes

6y

@Account Closed Even if the wording may not be 100% correct, it still serves as a dangerous precedent to what can happen to the rest of the nation.

Even if a tenant does not have all the correct documentation in front of a judge, I am sure they will side with the tenants. The mandate to prove hardship is pretty easy.

Even if we don’t want to join CAA, or use their email template. We should still write our representatives and stop this before it gains traction.

Government intervention for us landlords will not be favorable to us.

Kevin Phu

Rental Property Investor · San Diego, CA · Member since 2016 · 507 posts · 171 votes

6y

Originally posted by @Account Closed:

Denise,

I object to the assertions in the original post that it "would force every rental property owner in California to reduce rents by 25%". It does not.
Follow the links and you get an offer to join CAA, $193.25/yr was the fee quoted to me

Then to the bullet points:

Forcing landlords to reduce rents by 25% even if a tenant cannot demonstrate a hardship or need.

As your post shows, tenants do have to show "hardship or need"

Allowing judges and the court system to set rents and change the rental agreements already in place.

True

Assuming every tenant is facing a hardship related to COVID-19 and must be compensated for this hardship.

Not true, there is no assumption as your reply show

Protecting nuisance tenants as it does not require tenants to answer an unlawful detainer complaint

Not true, tenants are required to answer an unlawful detainer as your reply shows

Mandating that rental property owners demonstrate an economic hardship to collect the contracted rent.

True

Finally, all this is only active while a state of emergency for the COVID19 virus is active plus 15 days and completely expires Jan 1, 2021. I think it sets a bad precedent and do not consider it a reasonable law but the assertions in the original post are substantially false and inflammatory as can be seen by the subsequent comments

Straight from the text,

"In the absence of evidence to the contrary, if the increased costs for household necessities or decreased earnings took place at any point between March 4, 2020, and March 4, 2021, then the court shall presume that the increased household costs or decreased household earnings was due to the COVID-19 virus."

If I understand that correctly, if the tenant cannot provide evidence that increased costs or decreased income was to CV-19, it shall be assumed that it was. So pretty much any tenant can claim hardship without actually having one.

Account Closed

Rental Property Investor · Anthem, AZ · Member since 2014 · 7 posts · 10 votes

6y

"Assuming every tenant is facing a hardship related to COVID-19 and must be compensated for this hardship.". is what the original post claimed and I disagreed with.

The court does not assume a tenant is facing a hardship. They must show a hardship and then the court is allowed to assume the hardship is due to COVID19. So I disagree that "any tenant can claim hardship without actually having one". Showing a hardship means showing "increased costs for household necessities or decreased earnings". Merely claiming you have suffered a hardship without evidence isn't sufficient.

Now that is certainly going to include a lot of tenants but there is not an assumption on the part of the court that a tenant is facing a hardship written into the law.

Nela Perez

Member since 2020 · 1 post · 0 votes

6y

I agree with Ramon Flores...contact your Rep to oppose this bill! CA Landlords can handle this without gov intervention.

Derek Smith

Member since 2020 · 1 post · 0 votes

6y

Maybe AB 828 should reduce every landlord's mortgage and property taxes

25%. While they are at it, they should force the mortgage holder to

refinance the mortgage at 0%.